How to Stand Out as an Ideal Candidate for CFO Roles in PE

by: Kay Francoeur

 

CFOs are in high demand for PE firms and their portfolio companies. What are some of the ideal characteristics and typical career paths of professionals who succeed in these challenging, but potentially very rewarding, roles? 

 

CFO positions require strategic savvy, a keen eye for operational improvements that accelerate value creation across a firm’s portfolio, and, above all, a core commitment to financial leadership. Expertise heading up M&A and platform add-on “buy-and-build” processes is another desirable quality in a potential CFO, given the critical roles CFOs play throughout the deals process.  

 

At ECA, we work with a variety of PE firms to fill their CFO positions. The qualities we’re looking for in an ideal candidate vary somewhat depending on the firm’s investment strategy. If we’re looking for a finance CFO who leans in the strategy direction, we’re probably targeting candidates who spent a few years at one of the Tier 1 or Tier 2 strategy management consulting firms. For a CFO focused more on pure finance, we’ll look to those with solid experience at one of the Big 4 accounting firms – e.g., Deloitte, PwC, EY, and KPMG.  

 

If the particular CFO position will involve a lot of transaction work, our clients will be keen on candidates with backgrounds in investment banking and corporate development. And, logically, if the goal is to revamp the company’s tech stack or head up digital transformation efforts, we’ll be sourcing folks with a combination of transformation experience (at a Big 4 or Top 8 strategy firm) and hands-on experience as a VP of Finance and Operations.  

 

In short, there’s no one-size-fits-all career trajectory for an ideal CFO candidate, and the perfect profile largely depends on the firm’s investment goals. Individuals targeting these roles can acquire the relevant toolkit through a variety of strategies, as shown in the figure below. 

 

 

If you’re targeting a CFO role, it’s useful to understand expected compensation and how this is benchmarked, especially in terms of equity/carry. Generally, the larger the company, the larger the base and bonus tend to be. As Heidrick & Struggles report, the proportion of compensation shifts significantly once companies hit the $1Bn mark – at this point, the bonus tends to be a much larger proportion compared to the base salary.  

 

 

The carry component means that compensation breaks down differently in the short- and long term. Though the promise of equity is a big draw to the PE world, if an acquisition fails or a fund underperforms, equity might end up not being worth much at all. This caveat aside, CFOs in the PE space stand to earn a lot from carry. Heidrick & Struggles attest that, on average, CFOs can expect to take about 1% of revenue for companies up to $1Bn, and then slightly less (0.6%) at the largest companies. 

 

If a CFO role sounds like your perfect next opportunity, what are some tangible steps you can take to ensure search firms like ECA can easily find you when we’re sourcing for these roles?  

 

Make sure to spend some time optimizing your LinkedIn profile, since executive search firms like ECA use a tool called LinkedIn Recruiter almost exclusively to source talent. This means making sure you have a professional headshot and that your profile is up-to-date, highlights experience relevant to the jobs you want, shows you’re active on the site, and maximizes keywords that clearly reflect core competencies and functional expertise for the types of positions you’re targeting.  

 

In the case of CFO roles, keywords should highlight competencies in areas like financial leadership and oversight, due diligence, M&A, and value creation. McKinsey’s guide to CFOs’ four essential priorities addresses several challenges someone in this role is likely to encounter – articles like this can serve as helpful organizing principles as you’re shaping your LI profile to clearly show our recruiters that you’re well-equipped to leap over any obstacles you might face as our client’s future CFO.  

 

If you’re interested in learning more, check out our job board and YouTube channel, where we post CFO roles and other exciting opportunities in the PE space.  

 

 

Kay Francoeur is a Project Manager at ECA Partners. She can be reached at [email protected]

 

 

Kay Francoeur
Project Manager

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